Russia’s CTC TV network reports record revenues

Local TV ad market to hit $5.9 billion in 2013

Russia’s biggest commercial TV network, CTC, had a bumper 2012 with revenue up 5% on 2011 to a record $804 million and pre-tax profits up 4% to $256 million, as advertising bounced back despite a small dip in ratings for the net’s main channel.

CTC runs hit U.S. shows and Russian remakes such as “Voronin,” the local-language take on “Everybody Loves Raymond,” blockbuster movies and original productions across youth and young adult-oriented channels CTC, Domashny and Peretz, and Channel 31 in Kazakhstan.

Average audience share for CTC dipped to 9.6%, down from 10.7% in 2011, but Domashny and Peretz were both up.

Strong advertising sales, with 97% of inventory sold for the year and increased penetration of its channels, which now reach between 84% and 95% of Russian audiences, helped boost income to give CTC a net cash position of $173 million, allowing it to pay out $82 million in cash dividends, equal to 52¢ a share in 2012. The company plans to pay out 63¢ per share — a total of around $100 million this year — reflecting, the company said, its “philosophy to return surplus free cash flow to shareholders.”

The company won bids for digital licenses for Domashny and CTC channels in a Kremlin auction last December. Russia switches fully from analog to digital in 2015.

Boris Podolsky, CTC Media’s CEO, said: “We had a record year with sales for the first time exceeding $800 million. Both Domashny and Peretz outperformed the Russian television advertising market in terms of sales growth.”

Russia’s TV advertising market is expect to grow to $5.9 billion next year, making it Europe’s biggest, from $4.4 billion in 2011.

Podolsky said the market was due to be up 10% in rouble terms this year and that CTC’s share of the market would match that.

He added that 80% of ad inventory for 2013 had already sold “at higher average prices than last year.”